If this is your first visit, be sure to
check out the FAQ by clicking the
link above. You may have to register
before you can post: click the register link above to proceed. To start viewing messages,
select the forum that you want to visit from the selection below.

Fundamental Analysis: May 27, 2016

In the midst of positive economic forecasts, the dollar reinforced its positions. As stated by the Fed, the US regulator may heightened the rates at its conference this coming June. Meanwhile, in the economic news, the United States presented the Initial Jobless Claims wherein the volume appeared at 268,000 against the report of 275,000.

The euro was bolstered by the agreement happened between the Eurozone and the Greece. The latter attained an agreement with its creditors and shall take a new tranche of loans in the amount of 10 billion euro.

It has been inveterated that the recoupment of the British economy became sluggish by the second Gross Domestic Product estimate for the first quarter in the UK. The economy showed a growth by 0,4% in the first quarter from 0,6% in Q4 2015. The economy of Britain encountered a difficulty with a devitalized growth in emerging markets particularly in China. The approaching referendum also decelerated the growth.

The dollar stick around in a range waiting for the statement of Janet Yellen. The market is anticipating hints from the regulator about the probable rate hike in June. The yen raised and bereaved the dollar from its recent gains. The investors involuntarily close positions before there are any probable risk that may occur.

Fundamental Analysis for GBP/USD: June 15, 2016

A latest survey showing that Vote Leave is points ahead dragged the British pound to 1.41 cents against a stronger US dollar. As the EU referendum approaches, the sterling is swaying nonstop due to voters’ sentiment and the release of poll results after another.

TNS revealed yesterday that 47 percent of respondents wanted the UK to leave the EU, while only 40 percent wanted to remain a member of the bloc. GBP/USD fell to two-month lows.

UK inflation in May was also on the red, printing only a 0.3 percent rise, similar to the same period last year. Analysts were expecting a 0.4 percent growth. In m/m terms, CPI also disappointed as it climbed by 0.2 percent, missing the forecasted 0.3 percent. Transport costs rose by 0.9 percent in Mayi from the previous month but was offset by declines in food and clothing.

As we predicted, CPI didn’t have significant effect on the sterling especially because a Brexit poll was released in the same day. The Bank of England’s decision on its interest rate is next on the GBP’s economic headline.

The USD performed slightly stronger than its counterparts with the release of positive retail sales which hit 0.5 percent m/m against a 0.3 percent forecast. Core retail sales was in line with expectations at 0.4 percent. Both exports and imports at 1.1 percent and 1.4 percent respectively eclipsed their forecasted rates.

Atlanta Fed upgraded its GDP forecast for Q2 to 2.8 percent from an initial estimate of 2.5 percent. Strong retail sales was also viewed as a signal that consumer expenditure will most likely print robust numbers.

We are looking at an immediate support of 1.4089 and 1.4040 subsequently, while resistance is at 1.4265 and 1.4350. The MACD indicator is in negative location. The spot exchange is at 1.4142 and rising.

Fundamental Analysis for EUR/USD: June 22, 2016

EUR/USD was hit with profit-taking and a warning from ECB president Mario Draghi that another stimulus is on the way. The euro retreated to 1.12 cents after reaching 1.13 in the past days due to a firming ‘Bremain’ public sentiment. The pair is trading at 1.1272.

Draghi said that more stimulus is on the way as the ECB sees inflation rate missing the 2 percent target until 2018. Inflation is predicted to reach 1.3 percent in 2017 and 1.6 percent in 2018.

On the data front, Germany’s ZEW Economic Sentiment for June was at 19.2, largely exceeding the predicted 4.7 increase. The country’s current conditions grew to 54.5 from 53.1 in May, while the Eurozone’s economic sentiment was up to 20.2, surpassing the 15.3 expected rate.

The USD is also taking a beating from Yellen’s statement that shows Fed’s worry over the labor market. The Fed chairwoman effectively reduced the possibility of a rate hike in its next monetary meeting in July.

EUR/USD is still on the bullish side but a drop below the immediate support of 1.1240 will move it to a neutral position, with the next support at 1.1213. The first resistance is at 1.1291 and 1.1350 subsequently. The MACD indicator is in a positive location.

Fundamental Analysis for GBP/USD: June 23, 2016

GBP broke through 1.48 in early European session, peaking at 1.4830 due to two polls that showed the Remain camp leading by several points. This is the sterling’s highest rate against the USD in 2016.

According to YouGov, the Remain camp gathered 51 percent of voters while the Brexit camp recorded 49 percent. ComRes, another major polling firm, revealed similar results with the Bremain leading by 6 percent at 48 percent while the Brexit side was at 42 percent. GBP/USD is now in a consolidating phase as traders remain cautious in the hours leading to the referendum.

In the US, traders are going short on the USD as they wait for the huge impact the referendum’s result could bring. It is understood that the result along with the outcome of Fed’s assessment on a soft labor market will largely affect the interest rate in July.

Dutch bank ING predicted that a Bremain will propel the GBP/USD to the 1.52 level while a Brexit will push it to as low as 1.30.

The first support occurs at 1.4700 and 1.4659 subsequently. The first resistance occurs at 1.4830 and 1.4897. The MACD indicator is in positive location.

Fundamental Analysis: July 11, 2016

Silver prices went down Friday morning after the USD fared better than the expected NFP numbers, causing its sudden surge. However, Silver prices experienced a minor increase in its price after hitting an all-new low at $19.20, but this is still far from its weekly high of $21.11.

Should the prices of this metal go down again next week, a breakout amounting to less than $19.20 will be of significance. A move through this trend will make the next key value support at $17.99 as shown in the May 2016 high, suggesting a temporary suspension in the daily bull trend for Silver and opening its doors for more price declines.

If Silver continues to break until next week, then traders must look at the SSI to step away from its present extremes and spot the following resistance at $20.48. However a move at this point may suggest that Friday’s decline might just be a remainder of its lows. If this is the case then traders may expect Silver to trade back at its monthly high of $21.11.

Fundamental Analysis: July 12, 2016

The exchange rate of British pound to Euro (EUR/GBP) plunged a significant dip of 9 points just as euro has a little price action and the value of British pound emerges from default rate. At the moment, the pair seems to be holding the same level at 0.8514. Due to the extreme support of the European Central Bank monetary policy, it helped maintain the stability of prices and maintained the inflation rate close to medium term position. When inflation rate rises dramatically, there is a need to promote monetary easing in order to minimize financial costs and increase the amount of money flow in the market.

The investment sector is beset with difficulty, making it complicated to invest a new capital. To this extent the bank management should stabilize the global economy in order to aid bankruptcy. Every financial institution should write off undesirable credits or loans so as to recover losses and produce new income. Since the outset of the stock market storm in U.K. , the British pound ride out a way through it and made a 31-year low against dollar.

British sterling underscores a big fall of 13% versus dollar and 10% against euro. According to analysts, this will build up U.K exports because anything that is price-marked in sterling would be much cheaper for the foreign buyers. But the effect of these major lost in sterling offered mixed trade signals whether or not it would influence the external trade transactions.

Fundamental Analysis: July 13, 2016

The EUR/USD pair experienced a small upsurge after a possible stability of UK politics, lifting pressure from traders. The USD traded at 96.38 or 20 points lower, giving up some of its “safe haven” profit. On the other hand, the EUR traded today at 1.1088.

Consumer prices in Germany rose by 0.1%, while the yearly inflation rate for the past three months has increased from April’s -0.1%. Concerns within the Bundesbank may soon arise if the inflation rate continues its increase.

Fuel prices also went up as oil prices increased, causing transport costs to go up by 0.8%. On the other hand, food prices for this month went down at 0.4% while recreation prices increased after an upsurge in package holiday prices. On Monday afternoon, the EUR single currency experienced a marginal elevation against the USD after slightly up and down swings in a data-light session.

In general, the EUR was able to limit its incurred losses, thanks to the psychological barrier at the level of $1.10 for two consecutive sessions in spite of the turmoil caused by nonfarm payrolls.

Fundamental Analysis: July 14 2016

The Bank of Canada opted to maintain interest rates during their most recent closed-door meeting with the currency board and bank directors and eventually the rate of the Canadian Dollar moved higher yesterday. The USD/CAD keeps on pushing higher prices most of the trading session but the invested capital gains immediately fluctuate down to 1.2934 close to 1.2976, falling to 0.0064 or -0.49%. Since midsummer the BoC continued to retain its appropriate benchmark with a rate of 0.50%.

According to the central bank, the financial valuation of the BoC would likely have an economic growth, considering that it has increased by 2.4% during the first quarter of the year and is expected to decline by 1% by the second quarter. The assessment is inferred through the volatility of the capital flows, household consumption and the massive wildfire that ravage the Canada's region.

The central bank also anticipates the expansion of the Canada's economy by 1.3% up to 3.5% during the months of July to September. The BoC mentioned also their expectation of the price stability of oil prices for the rest of this year.

One of the problems emerged in Canada is the overall financial vulnerabilities as it resulted to a lower rates and experienced an adverse shock. Other news releases said that a 4% price fall in crude oil will restrain the weakening of the USD/CAD pair.

Fundamental Analysis EUR/USD: July 14, 2016

The EUR/USD pair was subject to pressure following the release of China’s latest trade balance data. The Euro went up by 0.0012 or roughly +0.11%, hitting 1.1084 from its low of 1.1042.

EUR traders can now breathe a sigh of relief after the trade balance data from China came out in their favor after the news release signalled a possible volatility. Exports came out at -4.8% after an estimate of -4.1%. On the other hand, imports came out at -8.4%, a long shot from its forecast of -5.0%. Meanwhile the dollar’s headline figure for June came out at $48.1 billion, about $2 billion lower than May’s headline figure, with economists gunning for a reading of $46.64 billion.

After US stock indices had an upward surge, Investors and traders are now back to monitoring global equity assets with the promise of higher risk assets, putting more confidence in the EUR/USD and aiding in its overall recovery.

USD/CAD Fundamental Analysis: July 18, 2016

The USD/CAD pair traded at 1.2971 and closed at 0.56% after the USD was restored and pressure was put on the market as international events shook traders during last Friday’s session. On Thursday, US numbers looked promising, as inflation rates went up after the PPI went over its estimated percentage of 0.3%, climbing up to 0.5%, the highest monthly gain since May 2015.

The Core PPI also exceeded expectations, gaining 0.4% after an initial estimate of 0.1%. However, Unemployment Claims remained stagnant at 254 thousand, way below the expected rate of 263 thousand. The consumer price index report of the US Department of Labor showed an increase in the CPI by 0.2% for June, while currency speculators renewed their net long position on the USD following a significant upsurge since June, after positive US economic data caused the currency to experience an increase.

The USD’s net long position increased after the week’s end on July 12, hitting $8.01 billion after last week’s $4.18 billion. US retail sales also picked up and went higher than expected, which shows how the economy went up during the second quarter of the year.